Affordable Medications Act

II 116TH CONGRESS 1ST SESSION S. 1801 To ensure medications are affordable. IN THE SENATE OF THE UNITED STATES JUNE 12, 2019 Ms. SMITH (for herself, Ms. KLOBUCHAR, Mr. BLUMENTHAL, Mr. UDALL, Mr. BROWN, Ms. WARREN, Mr. SANDERS, Ms. HASSAN, Mr. WHITEHOUSE, Mr. MERKLEY, Mr. REED, Ms. BALDWIN, Mr. BOOKER, Mr. DURBIN, and Mrs. GILLIBRAND) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To ensure medications are affordable. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Affordable Medications Act’’. 5 (b) TABLE OF CONTENTS.—The table of contents for 6 this Act is as follows: 7 Sec. 1. Short title; table of contents. TITLE I—TRANSPARENCY Sec. 101. Drug manufacturer reporting. Sec. 102. Determining the public and private benefit of copayment coupons and other patient assistance programs. VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1801 IS TITLE II—ACCESS AND AFFORDABILITY Sec. 201. Negotiating fair prices for Medicare prescription drugs. Sec. 202. Prescription drug price spikes. Sec. 203. Importing affordable and safe drugs. Sec. 204. Requiring drug manufacturers to provide drug rebates for drugs dis- pensed to low-income individuals. Sec. 205. Cap on prescription drug cost-sharing. Sec. 206. Modification of trade negotiating objectives relating to intellectual property rights to ensure access to biological products. TITLE III—INNOVATION Sec. 301. Innovation incentive fund for new and more effective treatments of bacterial infections. Sec. 302. Public funding for clinical trials. Sec. 303. Rewarding innovative drug development. Sec. 304. Improving program integrity. TITLE IV—CHOICE AND COMPETITION Sec. 401. Unlawful compensation for delay. Sec. 402. 180-day exclusivity period amendments regarding first applicant sta- tus. Sec. 403. 180-day exclusivity period amendments regarding agreements to defer commercial marketing. Sec. 404. Increasing drug competition and preventing drug shortages. Sec. 405. Disallowance of deduction for advertising for prescription drugs. Sec. 406. Drug manufacturer duty to disclose drug prices to practitioners. Sec. 407. Excluding authorized generic drugs from calculation of average man- ufacturer price under the Medicaid drug rebate program. TITLE I—TRANSPARENCY 1 SEC. 101. DRUG MANUFACTURER REPORTING. 2 Part P of title III of the Public Health Service Act 3 (42 U.S.C. 280g et seq.) is amended by adding at the end 4 the following: 5 ‘‘SEC. 399V–7. DRUG MANUFACTURER REPORTING. 6 ‘‘(a) DEFINITIONS.—In this section: 7 ‘‘(1) INDEPENDENT CHARITY PATIENT ASSIST- 8 ANCE PROGRAM.—The term ‘independent charity pa- 9 tient assistance program’ means any organization 10 described in section 501(c)(3) of the Internal Rev- 11 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1801 IS enue Code of 1986 and exempt from taxation under 1 section 501(a) of such Code and which is not a pri- 2 vate foundation (as defined in section 509(a) of such 3 Code) that offers patient assistance. 4 ‘‘(2) MANUFACTURER PATIENT ASSISTANCE 5 PROGRAM.—The term ‘manufacturer patient assist- 6 ance program’ means an organization, including a 7 private foundation (as so defined), that is sponsored 8 by, or receives funding from, a manufacturer and 9 that offers patient assistance. Such term does not 10 include an independent charity patient assistance 11 program. 12 ‘‘(3) PATIENT ASSISTANCE.—The term ‘patient 13 assistance’ means assistance provided to offset the 14 cost of drugs for individuals. Such term includes free 15 products, coupons, rebates, copay or discount cards, 16 and other means of providing assistance to individ- 17 uals related to drug costs, as determined by the Sec- 18 retary. 19 ‘‘(b) REPORTING ON DOMESTIC SALES.—An applica- 20 ble manufacturer of an approved drug (including a drug 21 approved under subsection (c) or (j) of section 505 of the 22 Federal Food, Drug, and Cosmetic Act and a biological 23 product licensed under subsection (a) or (k) of section 351 24 of this Act) shall submit to the Secretary and to Congress 25 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1801 IS an annual report, in such format as the Secretary shall 1 require, outlining with respect to the previous calendar 2 year (except as provided in subsection (c)(3))— 3 ‘‘(1) with respect to each such drug— 4 ‘‘(A) the total expenditures of the manu- 5 facturer on— 6 ‘‘(i) domestic and foreign drug re- 7 search and development, including an 8 itemized description of— 9 ‘‘(I) basic and preclinical re- 10 search; 11 ‘‘(II) clinical research, broken out 12 by clinical trial phase; 13 ‘‘(III) development of alternative 14 dosage forms and strengths for the 15 drug molecule or combinations, in- 16 cluding the molecule; 17 ‘‘(IV) other drug development ac- 18 tivities, such as nonclinical laboratory 19 studies and record and report mainte- 20 nance; 21 ‘‘(V) pursuing new or expanded 22 indications for such drug through sup- 23 plemental applications under section 24 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1801 IS 505 of the Federal Food, Drug, and 1 Cosmetic Act; 2 ‘‘(VI) carrying out postmarket 3 requirements related to such drug, in- 4 cluding under section 505(o)(3) of 5 such Act; 6 ‘‘(VII) carrying out risk evalua- 7 tion and mitigation strategies in ac- 8 cordance with section 505–1 of such 9 Act; and 10 ‘‘(VIII) marketing research; 11 ‘‘(ii) cost of goods sold, broken out by 12 source and cost of each component and 13 identifying specific costs that reflect inter- 14 nal transfers within the manufacturer’s 15 company; 16 ‘‘(iii) acquisition costs in total and per 17 unit sold, including costs for the purchase 18 of patents and licensing; and 19 ‘‘(iv) marketing and advertising for 20 the promotion of the drug, including a 21 breakdown of amounts aimed at con- 22 sumers, prescribers, managed care organi- 23 zations, and others; 24 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1801 IS ‘‘(B) the gross revenue, net revenue, gross 1 profit, and net profit to the manufacturer; 2 ‘‘(C) the total number of units of the pre- 3 scription drug that were sold in interstate com- 4 merce in the most recently completed calendar 5 year; 6 ‘‘(D) pricing information, including— 7 ‘‘(i) wholesale acquisition cost; 8 ‘‘(ii) net average price realized by 9 pharmacy benefit managers for drugs pro- 10 vided to individuals in the United States, 11 after accounting for any rebates or other 12 payments from the manufacturer to the 13 pharmacy benefit manager and from the 14 pharmacy benefit manager to the manufac- 15 turer; and 16 ‘‘(iii) the net price of the drug, after 17 accounting for discounts, rebates, or other 18 financial considerations, charged to pur- 19 chasers in each applicable country of the 20 Organisation for Economic Co-operation 21 and Development; 22 ‘‘(E) information, including the dollar 23 value to the recipient of manufacturer patient 24 assistance programs offered by the manufac- 25 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1801 IS turer or a manufacturer patient assistance pro- 1 gram sponsored by or associated with the man- 2 ufacturer, per patient, including— 3 ‘‘(i) the specific forms of such patient 4 assistance available, such as coupons, re- 5 bates, discount codes, or copayment cards; 6 ‘‘(ii) the total dollar value of each 7 manufacturer patient assistance program 8 and the dollar value of each program to 9 the patient, including the basis used to as- 10 sign value to the manufacturer patient as- 11 sistance program; 12 ‘‘(iii) the duration of each type of 13 such patient assistance available; and 14 ‘‘(iv) any requirements, such as in- 15 come thresholds, for how to qualify for 16 such patient assistance; 17 ‘‘(F) information on usage of patient as- 18 sistance offered by the manufacturer or a man- 19 ufacturer patient assistance program sponsored 20 by or associated with the manufacturer, includ- 21 ing— 22 ‘‘(i) the number of transactions of 23 each type of patient assistance used; 24 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 1801 IS ‘‘(ii) the number of individuals receiv- 1 ing each type of patient assistance; 2 ‘‘(iii) the total value of each type of 3 patient assistance that was used; 4 ‘‘(iv) the average length of time that 5 each individual received each type of pa- 6 tient assistance; 7 ‘‘(v) the number of individuals who 8 were discontinued from receiving each type 9 of patient assistance; and 10 ‘‘(vi) complete documentation of the 11 terms and conditions for an individual 12 agreeing to participate in the program for 13 each type of patient assistance provided; 14 ‘‘(G) any Federal benefits received by the 15 manufacturer, including the amounts and peri- 16 ods of impact for each such benefit, including 17 tax credits, patent applications that benefited 18 from a Federal grant, patent extensions, exclu- 19 sivity periods, and other Federal benefits with 20 respect to such drug; and 21 ‘‘(H) the percentage of research and devel- 22 opment expenditures on— 23 ‘‘(i) activities conducted by the manu- 24 facturer; 25 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 1801 IS ‘‘(ii) activities funded by Federal enti- 1 ties; and 2 ‘‘(iii) activities conducted by other en- 3 tities such as academic institutions or 4 other drug manufacturers; 5 ‘‘(2) executive compensation for the chief execu- 6 tive officer, chief financial officer, and the three 7 other most highly compensated executive officers, in- 8 cluding bonuses, paid by such manufacturer, and 9 stock options affiliated with the manufacturer that 10 were offered to or accrued by such officers; 11 ‘‘(3) any additional information the manufac- 12 turer chooses to provide related to drug pricing deci- 13 sions, such as total expenditures on drug research, 14 drug development, and clinical trials on drugs that 15 failed to receive approval by the Food and Drug Ad- 16 ministration, a list of drugs and drug prices against 17 which the manufacturer compared the applicable 18 drug, and other relevant information; and 19 ‘‘(4) any other information as the Secretary 20 may require. 21 ‘‘(c) SUBMISSION OF REPORTS.— 22 ‘‘(1) IN GENERAL.— 23 ‘‘(A) SUBMISSION BY DRUG MANUFACTUR- 24 ERS.—Drug manufacturers shall submit the an- 25 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 1801 IS nual reports required under this section sub- 1 mitted to the Secretary in a usable format, as 2 the Secretary may require. 3 ‘‘(B) COLLATION BY THE SECRETARY.— 4 The Secretary shall collate the reports received 5 as described in subparagraph (A) and submit 6 such collated reports to Congress, together with 7 an analysis of the reports by the Secretary that 8 includes— 9 ‘‘(i) a summary of data from the re- 10 ports; 11 ‘‘(ii) consideration of factors such as 12 trends on research and development costs, 13 Federal benefits, and manufacturer patient 14 assistance programs; and 15 ‘‘(iii) the relationship between the fac- 16 tors described in clause (ii) and prescrip- 17 tion drug prices. 18 ‘‘(C) PUBLIC AVAILABILITY.—The Sec- 19 retary shall make the reports submitted by 20 manufacturers as described in subparagraph 21 (A) and the collated reports together with the 22 analysis of the Secretary described in subpara- 23 graph (B) publicly available, including by post- 24 ing such reports to the internet website of the 25 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 1801 IS Department of Health and Human Services, in 1 a searchable format. In publicizing such re- 2 ports, the Secretary may redact such propri- 3 etary information as the Secretary determines 4 appropriate. 5 ‘‘(2) SINGLE REPORTS.—A drug manufacturer 6 shall submit all information required under sub- 7 section (b) with respect to each applicable drug, in 8 a single, annual report. 9 ‘‘(3) INITIAL REPORT.— 10 ‘‘(A) IN GENERAL.—An applicable drug 11 manufacturer shall submit a report pursuant to 12 this section one year after the date of enact- 13 ment of the Affordable Medications Act (except 14 as provided in subparagraph (B)) that includes 15 the information required under subsection 16 (b)(1) with respect to each calendar year since 17 the drug for which the report is required was 18 approved under section 505 of the Federal 19 Food, Drug, and Cosmetic Act, licensed under 20 section 351 of this Act, or received an exemp- 21 tion under section 505(i) of the Federal Food, 22 Drug, and Cosmetic Act or section 351(a)(3) of 23 this Act, or the calendar year in which the man- 24 ufacturer acquired the drug. 25 VerDate Sep 11 2014 03:57 Jun 19, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1801.IS S1801 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 1801 IS ‘‘(B) SMALL BUSINESSES.—In the case of 1 an applicable drug manufacturer that has fewer 2 than 500 employees, the initial report described 3 in subparagraph (A) shall be submitted by a 4 date determined by the Secretary, which shall 5 be not earlier than the date described in sub- 6 paragraph (A) and not later than the date that 7 is 3 years after the date of enactment of the Af- 8 fordable Medications Act. 9 ‘‘(d) PENALTY FOR NONCOMPLIANCE.—The Sec- 10 retary shall report to the Office of the Inspector General 11 any manufacturer’s failure to submit a complete report as 12 required under this section. Any manufacturer that fails 13 to submit a complete report required under this section 14 shall be subject to a civil penalty of up to $200,000 for 15 each day on which the violation continues. The Secretary 16 shall collect the civil penalties under [Text truncated for display. Full text available on Congress.gov.]